Mumbai: The government can provide an equity support of up to Rs 20,000 crore annually without a problem to state-run banks to meet stricter Basel-III capital norms, a senior official said here on Tuesday.

But the government will have a problem in funding beyond this level, he added

"Rs 15,000 to 20,000 crore (of capital infusion to banks) every year can be sustained without any issues. (But) if it goes beyond that, then we have a problem," Additional Secretary in the Department of Financial Services Sunil Soni told reporters on the sidelines of an event here.

The government has a budgetary allocation of over Rs 14,000 crore towards recapitalisation of public sector banks for FY13 and Soni said the amount will definitely be distributed among the needy banks.

The comments come within a week after RBI Governor D Subbarao pointed out that the government would find it difficult to fund banks' migration to the Basel-III norms due to its precarious fiscal condition.

He had said the government would have to provide Rs 90,000 crore to keep its stake in banks above 58 percent, and Rs 70,000 crore if it wanted to take the stake down to 51 percent.

The government, as a prudential measure, has decided to retain at least 58 percent holding in all its 26 banks.

The government will have to make necessary changes in the statutes to maintain its majority voting rights if the stake goes below 51 percent, the Governor had said.

Alluding to it, Soni said, "We can go down to 51 percent, we can also go below 51 percent but that's a political decision. At the right time, someone will take the decision."

Soni, however, stressed that at the current moment, there is no immediate crisis at hand as changes in capitalization norms are expected only after 2015.

"We have asked all the banks to do an assessment of their requirements and take it to their board, get it approved from the board and send to us," he said.

Soni said the first option will be for banks to raise resources through internal accruals and the government infusion will only come as a secondary alternative.

Soni said the real allotment will have to be made from 2015 and the interim period is a "preparatory stage".

"If banks can improve their profitability, then perhaps the need for capital from the government or from the public will go down to that extent," he said, stressing there are many options available with the government.

All the banks have been given a deadline till end of FY18 for gradually migrating to the Basel-III norms, which have been adopted by a majority of central banks across the world to avoid a repeat of a 2008-like credit crisis.

The Basel-III norms reclassify capital and also ask for higher buffers.